Levels of Expertise Explain Divergent E-Mail Marketing Strategies, New DMA Study Finds

March 20, 2007 — Despite e-mail marketing’s success in producing 11.7 percent of total offline sales and 23.5 percent of online sales in 2007, a study just released by the Direct Marketing Association (DMA) reveals a surprisingly wide variation in e-mail marketing practices, metrics, and performance among marketers, including a large number who still avoid e-mail altogether. The research, “Actionable Insights into E-Mail Marketing,” attributes much of the variation among different practices, metrics, and results to marketers’ level of self-reported competence or expertise levels.

“We knew about the discrepancies from earlier research, ours and others’, and introduced two new variables into our 2007 questionnaire: company age and level of expertise,” said Eugenia Steingold, PhD, senior manager of the DMA’s Research and Market Intelligence Unit.

“Segmenting by expertise proved to be extremely revealing,” Dr. Steingold said. “As part of an e-mail marketing survey conducted for this report, respondents were asked to rate their own level of expertise, from beginner through expert. We weren’t sure if marketers could rate themselves accurately. Fortunately, the claimed expertise levels matched up with the performance levels they achieved.”

“With these expertise-based segments, we can clear up much of the confusion among e-mail marketers,” said Peter A. Johnson, PhD, vice president of research and market intelligence at DMA. “Not only that, with this approach we can also help them map a migration path from one competence level to the next.”

Responding companies were also categorized as marketer or service provider; business-to-consumer (B-to-C), business-to-business (B-to-B), or both; and by company size.

DMA’s new e-mail marketing research also finds some surprises at the tactical level, including:

· Although three in four e-mail campaigns aim at customer retention, one in four are used to acquire customers. That frequency is greater in 2007 than in 2006, which was greater than in 2005.

· Especially popular acquisition practices include company announcements (68 percent), company newsletters (65 percent), special discounts (63 percent), and one-time offers (63 percent).

· In assessing challenges, service providers and client-side marketers have a disconnect. Service providers rank deliverability as the most challenging aspect of e-mail marketing. By contrast, marketers see segmentation/targeting, integration with other channels, and list-building as more challenging than deliverability.

· When marketers do use e-mail in concert with other marketing channels, two out of three use special offer codes to integrate the channels.

· B-to-B companies trail their B-to-C counterparts in the use of e-mail marketing. B-to-C marketers forecast that they will allocate 11 percent of their total marketing budget to e-mail marketing in 2007, while B-to-B companies predict allocating 6.5 percent.

According to Dr. Steingold, “DMA has the opportunity and the responsibility to provide knowledge that is without bias and useful to the entire industry. The 49-question survey is certainly among the most comprehensive ever fielded.”

The report’s topics include budgeting; permissions; list building, sharing, maintenance, segmentation, and targeting; authentication and deliverability; and performance metrics — communications and financial.

The research was conducted online in November 2006.

The new report and accompanying CD, “Actionable Insights into E-Mail Marketing, 2007 Edition,” is priced at $245 for DMA members and $445 for non-members. For more information on this and other DMA reports, and to make a purchase, please visit www.the-dma.org/bookstore.

# # #